Natural Gas Price Analysis – Natural Gas Continues to Look Soft

Natural Gas Technical Analysis

Natural gas has drifted a little bit during the trading session on Thursday to the downside as we continue to operate in what is known as the shoulder season, which is between high-demand timeframes. For example, the wintertime has a lot of heating demand in the United States, while the summertime can have a lot of electric demand for air conditioning.

Now, longer-term natural gas is probably going to be a big winner, but this time of year is horrible for natural gas, and you can see that we have recently pulled back from the 50-day EMA, and it looks like we’re going to try to get back down to the $2.55 level.

Supply and Demand Pressures

This is a market that, at this time of year, I just do not buy. I look at all signals that look like they’re going to bounce as a potential time to get out of a short. Ultimately, I think you’ve got a situation where the demand just can’t pick apart the supply. The supply in the United States is extraordinarily high and with that I think you continue to see plenty of pressure at least for the next month or two.

Eventually, we’ll start to talk about heatwaves, but we’re nowhere near that right now. In fact, it’s pretty comfortable weather overall in the US and that is the caveat. This is a US-based contract, and unfortunately, a lot of retail traders don’t recognize that. This is about America, really not too many other places at the moment. However, this winter could be interesting, as the Europeans might be forced to buy US gas in larger quantities.

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